Illinois Child Support Calculation: Determining Income

The Illinois Supreme Court ruled in the divorce case of In re Marriage of McGrath that funds regularly withdrawn by a non-custodial parent from a savings account are not to be considered “income” for purposes of calculating child support.

The ruling provides a new perspective on non-custodial parents’ income and assets by distinguishing between pre-existing assets or funds versus actual income received as an addition or benefit to the parent.

Under the ruling, the court reiterates the significance of ensuring that trial courts specify their reasons when ordering a child support amount other than the amount figured according to the statutory guidelines.

Additionally, this opens the door to considering whether withdrawals or disbursements from other types of investment or retirement accounts (prior to retirement) may be addressed in a similar way; however, the Illinois Supreme Court does not address other types of accounts in its ruling in McGrath.

In light of this decision, divorced dads who are involved in or contemplating addressing child support issues with the court should consult with their Illinois divorce lawyer as to the implications of any withdrawals or receipt of funds from a pre-existing account and/or regular use or withdrawals of pre-existing funds when a parent is unemployed.

Illinois Supreme Court Ruling: Type Of Income Considered For Child Support

The Supreme Court rejected the appellate and trial court rulings that since the father was drawing down his savings to live on while seeking employment, such withdrawals were a form of income. The Supreme Court brought logic to bear, noting that since the father was spending money he already owned, such money was not “income” under a common sense, dictionary definition approach to the statute.

In this case, the trial court reserved the issue of child support at the time of the parties’ divorce in 2007 due to the father being unemployed. In 2010, the mother petitioned the court to address the issue of child support for the parties’ two children.

Given that the father was still unemployed at that time, he was withdrawing approximately $8,500 per month from his pre-existing savings account to cover his monthly expenses. The trial court ordered that the father pay $2,000 per month for child support primarily based on the $8,500 he was withdrawing from his savings.

The trial court explained that because the father was “receiving” these funds on a regular basis and using these assets to cover his living expenses, that it should be used in calculating child support.

The father pursued further appeal, and the Illinois Supreme Court agreed with the father’s position that it was incorrect for the trial court to include his savings account withdrawals as “income” for calculating his monthly child support obligation.

The Illinois Supreme Court reasoned that the funds withdrawn by the father each month from his savings account consisted of funds already belonging to the father specifically stating, “the account owner is not ‘receiving’ the money because it already belongs to him.”

Illinois Definition of Net Income

Illinois law defines “net income” for child support purposes as “the total of all income from all sources” minus specific deductions prescribed by the statute. In reaching its determination, the Illinois Supreme Court reasoned that the trial court’s decision failed at this initial step in calculating child support, as its starting point included the $8,500 monthly withdrawals from savings, which did not constitute “income” under the statute.

While the Supreme Court found in the McGrath case that the savings account withdrawals could not be included in figuring the father’s net monthly income under the statutory guidelines, the trial court could still take into consideration father’s assets (including his savings account) in deciding whether the new child support amount under the statutory guidelines was appropriate, and potentially deviate from that amount if it provided reasons for it being inappropriate.

While the court is required to first calculate child support using the guidelines specifically set forth in the statute in every case, the court is permitted to determine that the child support amount reached after applying the statutory guidelines is inappropriate and deviate from that amount.

However, in doing so, the court is required to state its reasons for varying from the guidelines and must consider the best interests of the child in conjunction with any of the following factors:

1) The financial resources and needs of the child, the custodial parent, and the non-custodial parent;

2) The standard of living the child would have enjoyed had the marriage not been dissolved; and

3) The physical, emotional, and educational needs of the child.

Divorced dads who are involved in or contemplating addressing child support issues with the court should consult with their Illinois divorce attorney in light of this new child support ruling.

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